The housing market in Pennsylvania is currently at record levels. Experts predict significant changes over the coming year that could impact you and your home.

If you're a potential buyer or current home-owner in Pennsylvania, you need to understand PA housing trends. Buying or selling at the wrong time could be a serious financial mistake.

We've put together this guide to housing trends and the current market in Pennsylvania to help you make the right choice.

Read on to find out what to expect for the rest of this year.

PENNSYLVANIA HOUSING MARKET OUTLOOK

It's been a strange few years for the housing market, and the current outlook is still being impacted by the end of the pandemic. With the remote working trend still going strong, more people are looking to move to the suburbs and countryside, further from the office.

Average Prices

As a result, the average home in PA is now worth over $260,000, an increase of around 15% from last year. In 2021, the average house price was under $235,000 showing a big jump over the past year.

However, in Philadelphia City, the average house price is under $190,000. This reflects the general desire to move out of cities.

Experts believe house prices will likely rise even more in 2023. The conclusion is that it's a sellers' market and a better time to sell than buy.

Renting prices have also been relatively low, with rent down between 3% and 11% in most cities. Dense, urban areas saw a significant drop in rental prices, with Pittsburgh and Philadelphia suffering the most.

However, rent did increase overall by around 20%. The boom in demand in rural areas makes up for the decrease in demand in major cities.

Mortgages and Inflation

Mortgage rates have been low for a while but probably won't remain low as we approach the end of the year.

With inflation on the way, mortgage rates will rise to match this, continuing to put the market in the seller's favor and making it hard for first-time home buyers in PA.

As the mortgage rates climb, the market will slow down. However, this won't be felt until mid-2023 at the earliest.

Inflation also means more buyers are turning to insurance companies offering post-policy inflation coverage. Flexible home insurance policies will continue to make buying and selling easier and help first-time buyers enter the market.

UPCOMING PA HOUSING TRENDS

The pandemic threw the entire housing market into a spin. Construction stopped, people stayed home, and there was a sudden collective desire to move to rural areas.

While some of these trends look set to continue impacting the market, others are coming to an end.

So what can we expect from housing marketing in Pennsylvania in the coming year?

Move to the Country

The post-pandemic rural trend looks set to continue with more people moving away from densely populated areas. City populations have either stopped growing or are actively declining. People want fresh air and open fields.

The result is that housing in the city is more affordable than in previous years. This trend will likely continue across Pennsylvania real estate for the next few months. However, with affordable prices, demand is high.

Construction Boom

A post-pandemic trend set to reverse is the construction shortage. Construction ground to a halt during the pandemic. But the building industry is now thriving again, and new houses are popping up everywhere.

The rising cost of raw materials may slow down the construction boom slightly, but not significantly. The next year will still see plenty of construction and made-to-measure houses at affordable prices.

Increased demand for new homes continues pushing workers to build more houses, so expect plenty of new builds on the market in the next year.

Fewer Homes for Sale

Despite the construction boom, fewer houses are on the market than in recent years. Many people choose to remain in their current home, so the market is moving fast.

More people are looking to buy homes and snapping them up faster than people can put them on the market. Homes are selling fast, but anyone looking to buy is in a very competitive market.

Current data suggest this will continue for the rest of 2022 and 2023.

Slow Rental Market

With more people looking to buy and using financial aid and schemes for first-time buyers, the rental market is slowing down. While this means renters are having a slightly easier time, it looks like one trend that will change soon.

The 2022 housing report suggests rent in major cities such as Pittsburgh could rise by around 10% in the coming years. Investors looking to own rental properties should buy now while the market is a bit slower and enjoy higher rental prices in the coming years.

Increase in House Prices

2021 saw a jump in house prices, and 2022 and 2023 look the same. Unemployment in PA is down, and the economy is recovering, meaning house prices are slowly rising. Particularly in rural areas which attract out-of-state investors, house prices could well jump again.

This could help slow the fast sale market but will make it harder for first-time home buyers in PA to get on the market. With home values increasing, this trend is unlikely to slow down or stop in the coming years unless there is a significant economic shift.

PENNSYLVANIA HOUSING MARKET RECOMMENDATIONS

The predicted increase in mortgage rates and a potential jump in house prices means now is an excellent time to buy if you can. But with so few homes for sale and lots of demand, it can be hard to start.

There are still plenty of affordable homes, especially in some big cities, but these housing trends won't last long. People who buy should be prepared to move fast and jump when the right property presents itself.

To discuss the buying and selling process, get in touch with the Heartland Abstract team so you're ready when the moment comes.